An LPL Financial hybrid RIA with at least 33 advisors and $650 million in client assets is leaving the No. 1 independent broker-dealer, in the ninth major exit after a change in the firm’s policies.
Patriot Financial Group
LPL unveiled rules last year that cut fees on the platform while also requiring new advisors
The Boston-area super office of supervisory jurisdiction picked Securities America out of a dozen IBDs in an 11-month process, according to O’Donnell and Tashjian. The move will allow the OSJ’s advisors to reduce their operating expenses and expand their custodial options, Tashjian says.
“Securities America was the one broker-dealer that would really allow our advisors to maintain their independence and support our RIA,” he says.
O’Donnell adds that their new IBD also added the Black Diamond Wealth Platform to its technology options only two weeks after Patriot Financial made the request. Fee-based advisory accounts and independent RIAs are “here to stay” because they’re “the best deal” for advisors and clients, he says.
“So many broker-dealers seem to be scrambling just to stay alive. Securities America, to us, seemed to have the same perspective of the future,” O’Donnell says. “Mike and I wanted our OSJ to be centered around that. They grasped that, they said those same things.”
-
Securities America and Atria Wealth Solutions hired recruiting and operational heads from Ameriprise and Cetera.
June 20 -
The No. 9 IBD has emerged as one of the major players in a tough recruiting fight after the massive acquisition.
March 7 -
The firm is tapping a pool estimated by LPL to be as large as 1,200 brokers with $35 billion in client assets.
February 14
The ongoing shift away from commissionable products is driving major changes in the space.
Representatives for LPL, which said it had more than 420 hybrid RIAs with 5,200 advisors at the end of 2017, didn’t respond to requests for comment. In
“You’re likely to see that same level of outflows in both the next two quarters,” Arnold told analysts. “That said, we’re obviously committed strategically to offering both the corporate RIA and the hybrid platforms. We’ll continue to invest in both and make sure our advisors can differentiate and win.”
In its announcement of the latest exit, Securities America had
O’Donnell and Tashjian’s OSJ is still working to complete their full transfer of assets and advisors, they say, which will bring their client assets and head count up to the higher levels. Patriot Financial currently has $322.5 million in advisory assets under management in its RIA, according to SEC Form ADV.
LPL also retained about a quarter of the OSJ’s representatives after making a push to keep as many as possible in the fold, according to O’Donnell and Tashjian. They replaced many of the lost reps through recruiting, to the point that around 95% of their production is moving with them, they add.
O’Donnell, who had spent nine years with LPL following stints with Lincoln Financial Group and New England Securities in his 29-year financial career, joined Securities America on June 29, according to FINRA BrokerCheck.
Tashjian had affiliated with LPL for three years prior to his move on the same date. In his 22-year tenure in finance, he has also affiliated with MML Investors Services, New England Securities and Pruco Securities. He also cites problems with LPL’s technology as leading the OSJ to consider a new IBD.
Securities America provided a seven-year forgivable loan to Patriot Financial’s advisors based on their production, the firm’s ADV shows. The OSJ managers and Gregg Johnson, Securities America’s executive vice president of branch office development and acquisitions, decline to state the specific criteria.
Ladenburg’s suite of products and services also helped draw them to Securities America, Johnson says.
“Patriot is definitely a group that’s well known in the upper Northeast,” Johnson says. “They’re passionate about supporting the independence of the advisors that they work with, and we’re passionate about supporting advisors and OSJs and super OSJs. So it was a great match.”
